Citi's note on the Bank of Canada, its response to this week's policy decision, comes via eFX:

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"The BoC remains firmly hawkish; does the future hold 75bps?

  • Overall, the tone of the statement was hawkish with the most notable statement being, "the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2%inflation target.
  • "Given this comment comes on the back of a 50bp hike, which BoC Governor Macklem himself had called an "unusual move" back in a parliamentary committee hearing in late April, this should stoke higher expectations for a potential 75bp move in the future should inflation continue to print above expectations,"
Bank of Canada